Sept. 2, 2011 – Wisconsin Dolls LLC, an adult-oriented resort facility in Wisconsin Dells, had a good thing going (in their view) until a new town clerk rolled into town.

The establishment was able to obtain licenses for fermented malt beverages and intoxicating liquor “on all 8 acres” of its resort from 2004 through 2008.

But when it applied for a renewal in 2009, the new town clerk of Dell Prairie said “all 8 acres of the resort” was inadequate to describe where liquor would be kept and served. The Town Board of Dell Prairie agreed with the town clerk’s assessment.

When Wisconsin Dolls failed to amend the renewal, the clerk issued a license covering the “main bar and entertainment building.” This limited the areas in which liquor and malt beverages could be served.

Wisconsin Dolls sought certiorari review in circuit court, arguing the town’s action constituted a nonrenewal triggering procedural rights under Wis. Stat. ch. 125 and procedural due process rights under the Fourteenth Amendment. In other words, Wisconsin Dolls argued it was entitled to notice and an opportunity to be heard before the town limited the premises description of the license.

But in Wisconsin Dolls LLC v. Town of Dell Prairie, 2010AP2900 (Sept. 1, 2011), the District IV Wisconsin Court of Appeals ruled that Wisconsin Dolls did not have a right to statutory procedures because the previous license covering “all 8 acres” violated provisions of ch. 125 and was therefore void.

“For similar reasons, Wisconsin Dolls did not have the right to procedural protections under the due process clause of the Fourteenth Amendment before the Town limited the premises description,” wrote Judge Margaret Vergeront for the appeals court.

Particular description

Under Wis. Stat. section 125, any liquor license issued in violation of a ch. 125 provision is void. Under section 125.26(3), the specific license sought by Wisconsin Dolls, for malt beverages and intoxicating liquor had to “particularly describe the premises for which issued.” Contrary to the town’s view, Wisconsin Dolls argued that “all 8 acres” particularly described the premises covered by the license.

The appeals court ruled the phrase “particularly describe the premises” means “that the license must contain sufficient detail to identify the specific areas where the alcohol beverages will be sold or stored or both” and the “the total amount of acreage of the licensee’s property does not fulfill this definition."

“[T]o authorize the issuance of a license for the entire acreage of a licensee’s property would allow the licensee to unilaterally expand the areas within that acreage where the licensed activity takes place, without any oversight by the issuing authority,” Judge Vergeront wrote.

Statutory procedure

Under section 125.12(3), the town was required to provide notice and a hearing before choosing to not renew the license, Wisconsin Dolls argued.

The previous license issued by the town covered “all 8 acres of the resort.” This license became void because it violated ch. 125’s requirement that a license particularly describe the premises,” the appeals court explained. Thus, Wisconsin Dolls did not have a valid license to renew.

“Wisconsin Dolls did not have a valid license for all eight acres. Therefore, the procedural protections for renewal in § 125.12(3) do not apply,” Judge Vergeront explained.

The appeals court did not answer the question of whether a municipality has the authority to modify a license application and issue a license with a limited premises description.

Procedural due process

Wisconsin Dolls also argued that it had a property interest in the renewal of its previous license covering all eight acres, so it was entitled to procedural due process before the town modified the description.

The appeals court explained that “[n]o State shall … deprive any person of life, liberty, or property, without due process of law” under section 1 of the Fourteenth Amendment to the U.S. Constitution.

Without deciding whether the holder of a valid license under ch. 125 actually has a property interest in the renewal of the license, the appeals court reiterated that Wisconsin Dolls did not have a valid license “and therefore does not have a legitimate claim of entitlement under ch. 125 to the renewal. …” Thus, Wisconsin Dolls did not have procedural due process rights under the Fourteenth Amendment.